Massachusetts Senate to Vote on Budget that Lowers Taxes on Housing Construction, Sends Money to Municipalities, Invests in Education and Statewide Transit

 Massachusetts Senate to Vote on Budget that Lowers Taxes on Housing Construction, Sends Money to Municipalities, Invests in Education and Statewide Transit   

Bill pairs innovative policy changes with generational investments in schools and statewide transportation  

 

(BOSTON—4/2/2026) Next week, the Massachusetts Senate will debate a supplemental budget bill that spurs new multifamily housing construction, boosts the family medicine workforce, and eases strained municipal budgets with regionally equitable Fair Share investments. 

 

The legislation was approved today by the Senate Committee on Ways and Means.  

 

The supplemental budget, S.3041, includes innovative policy proposals to eliminate the sales tax on housing construction materials and deliver scholarships to UMass Medical graduates who agree to deliver care to underserved populations in Massachusetts after graduation. 

 

The bill utilizes $1.34 billion from the Fair Share surtax on high-earning households to make investments in public education and transportation across the state. The Senate plans to debate the legislation during a formal session on Thursday, April 9. 

 

Education funding includes $150 million for early education and care initiatives and $232 million for special education costs and local reimbursements, while transportation investments feature $535 million for MBTA and commuter rail programs and improvements and $218 million for statewide road and bus supports, including municipal funding relief for winter storm expenses. 

 

“By including innovative policy solutions with strong investments, in this budget we are going beyond just allocating funding,” said Senate President Karen E. Spilka (D-Ashland). “We are lowering taxes to spur housing, building our health care workforce, and protecting our immigrant neighbors, on top of making generational investments in statewide transit and education. I’m grateful to Chair Rodrigues for his leadership in delivering this bill, and I look forward to voting on it next week.” 

 

“This Fiscal Year 2026 consolidated supplemental budget prioritizes municipal relief and regional equity, makes meaningful Fair Share investments in education and transportation, and is fiscally responsible by mitigating near-term revenue impacts associated with federal tax changes,” said Senator Michael J. Rodrigues (D-Westport), Chair of the Senate Committee on Ways and Means. “It strives to boost the family medicine workforce pipeline through a higher education scholarship program, eases strained municipal budgets with statewide Fair Share investments and fosters conditions to boost the state’s housing stock. I want to thank Senate President Spilka for her steadfast support and all of my Senate colleagues for their input throughout this process and look forward to further improving this bill during the full Senate debate next week.” 

 

Sales Tax Exemption to Spur Housing Construction 

 

The legislation would incentivize production of new affordable, moderate-income, and middle-income housing units by creating a new sales tax exemption for building materials, supplies, and other related costs associated with approved multifamily projects. The exemption would be capped at $35 million annually.  

 

To target production in areas with the greatest need, the program focuses on projects that include at least 15 per cent affordable units and projects in communities where the median household income is below 120 per cent of the average household income. The Executive Office of Housing and Livable Communities (EOHLC) would be tasked with prioritizing project approval. 

  

Scholarships to Boost the Primary Care Workforce 

 

The Committee’s bill takes a novel approach to improving recruitment and expanding the workforce of family medicine physicians in Massachusetts. The legislation creates a new pilot scholarship program to provide free tuition to medical students pursuing family medicine at the UMass Medical School if they commit to staying in Massachusetts and serving populations in need. 

 

Eligible students would complete their degree and then practice family medicine in Massachusetts for at least five years at a community health center or within a hospital system that serves low-income patients. The legislation funds the pilot program with $10 million in Fair Share revenues. 

 

Robust Aid to Ease Strained Municipal Budgets 

 

In an effort to relieve extraordinary strains on local town and city finances, the legislation provides an infusion of $391 million in targeted aid to ease municipal budgets. Following recent severe storms, the supplemental budget sets aside $100 million for municipal winter relief, including $20 million specifically marked for communities that weathered especially severe storm impacts.  

 

The bill would also send relief to school districts with $232 million for special education costs, including $32 million in immediate relief by increasing reimbursement rates for the current fiscal year. Other municipal aid includes $25 million to assist with the costs of regionalizing smaller school districts; $15 million for the literacy launch initiative to improve educational outcomes and support accelerated literacy growth for learners from kindergarten through 3rd grade; $7 million for maintenance of unpaved roads; $2.5 million for school-based mental health support and wraparound services; and $1 million to help public school districts implement bell-to-bell cell phone-free school policies. 

 

The bill advanced today by the Senate Committee on Ways and Means is a new draft of legislation previously passed by the House of Representatives on March 18, 2026, and based on a bill filed earlier in the year by Governor Maura Healey. 

 

In addition to the supplemental budget’s more than $1 billion in Fair Share investments for education and transportation, the legislation makes nearly $500 million in supplemental appropriations from FY26 general fund revenues. That supplemental spending includes: 

 

·       $300 million for Group Insurance Commission costs driven by higher-than-anticipated utilization and pharmaceutical expenses. 

·       $41.7 million for Department of Transitional Assistance (DTA) staffing, supporting caseworkers responsible for administering core assistance programs, and implementing recent federal eligibility changes. 

·       $20 million for increased Low Income Home Energy Assistance Program (LIHEAP) fuel assistance, supporting households with children, veterans, disabled and elderly persons facing strain with their heating bills because of the colder than average winter. 

·       $12.3 million for Committee for Public Counsel Services court costs, including expert witness and vendor services tied to elevated caseloads. 

·       $1 million for legal services to increase access to legal representation, advice, and advocacy for immigrants and refugees who are facing enhanced legal threats from the federal government. 

All committee votes are publicly posted on the Legislature’s website. Additional details of legislation up for consideration by the Senate are included in fact sheets available in the Senate press room.